I set the gap with the fiber a little past the line, then rotate the motor to the large lobe and check the gap again to make sure. you should also retard the circuit breaker and advance it again and recheck to make sure your setting is staying consistant.

I see there are conflicting thoughts on this and no definitive answer? The original HD manual says at the highest point, but then why is there a mark on the narrow part of the cam that is definitely not the widest point of the cam? ( by the way I have a "auto advance timer")

Jarhead,
The mark is a reference point for TIMING and has nothing to do with points gap. If you are setting your gap on the mark it will never be right. Set the gap in the middle section of the wide lobe and double check it to the highest point of the narrow. It should match. And always set your points before any attempt at timing the circuit breaker.
Robbie

Good Answer Robbie!
Jarhead,
The mark milled into the top of the timer shaft is only a "rough" indicator that you use when stabbing the timer into the engine. The mark should line up with the fiber cam follower on the points when the timing mark on the flywheel is in the hole and the front cylinder is on compression stroke, etc., etc, you know the drill.

I like to get everything close, as above, and then put the bike in 2nd or 3rd gear, clutch engaged, and roll the bike forward until I find the "widest" point opening and set them there. It is usually easier to do it that way than to try to bump it with the starter pedal. If you have to go back and forth to check your setting make sure that your final adjustment is made after you roll the bike forwards so the engine is turning in the normal rotation and all the slack is taken up. Pulling the plugs makes this method a lot easier.